Like many other countries, South Korea has been experiencing an economic slowdown that increasingly feels structural (long-term) in nature. Their response: to move on.
Korea has identified innovative technology & creative businesses as its next growth engine as it transitions from a manufacturing base to a technology-driven creative economy.
Korea, with the rest of us, is experiencing slowdown and facing the challenge of maintaining the competitiveness of its companies while sustaining economic growth. Innovative technology has been identified as the solution.
The Korean government has set in motion “Manufacturing Innovation 3.0”, a program aimed at upgrading industry through manufacturing innovation.
Innovation 3.0 is largely built around the Internet of Things (IoT), technology that connects online data with physical subjects. Korea wants to develop the technology and adapt it to make devices ranging from automated cars & smart clothes to flexible batteries.
Innovation 3.0 will also focus on the development of the 5th generation of mobile technology (the 5G network), looking for commercialization of the network by 2020, extending its 4G network penetration of today.
The 5G network will support data transmission speeds of up to one gigabyte per second (1000 times faster than the 4G platform). For instance, 5G users will be able to download a full-length movie in a second.
The needed infrastructure has been mostly in place and a full-service trial is expected to be launched at the Winter Olympics in Pyeongchang in 2018.
Innovation 3.0 identifies 13 growth engine projects aimed at creating a manufacturing ecosystem based on IoT and other digital innovations. It will require a massive industrial re-orientation away from today’s heavy industry (reminding of similar consumption-driven ambitions next door in China).
The intention is to have advanced manufacturing processes within the new ecosystem produce a range of innovative products such as for instance new materials, autonomous vehicles and robotics with health & safety functionality.
The main focus of the new ecosystem will be on reinventing Korea’s manufacturing sector. Its car, machinery, textile & electronic appliance segments are facing increasing global competition and need to be upgraded to stay competitive. The intention is to achieve a flow of patented processes & products that can be commercialised in the near future.
The three main pillars of the Korean economy since the 1990s have been heavy industries such as shipbuilding, petrochemical & steel-making, but these have been suffering from global oversupply. The Korean government intends to encourage voluntary business restructuring of these sectors.
The government has created 17 centres for creative economy and innovation (CCEI) across the country. Each centre is backed by a large conglomerate and will assist small- and medium-sized businesses in developing their innovative ideas and bringing them to market.
Korea is also reforming its education system to inspire creativity, placing greater emphasis on problem-solving through experimentation. By focusing on science, technology, engineering, art & mathematics, Korea hopes to develop a workforce equipped to thrive in the technology-driven manufacturing businesses of the future.
It is a vision other countries can take to heart as they struggle with their own transition challenges, especially those that aren't particularly well focused or organised, with their education systems in disarray.
Danny Leung “Korea unveils roadmap for creative economy” FinanceAsia 19 October 2015